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You don't need to connect to a blockchain to make a transaction. You just need to connect to someone who is connected to a blockchain. Big difference.

Blockchain isn't where the concern is. It's where the exchanges interact with the banking system.

The EU can't tell each country's ISPs what to ban or not. That is a matter for each country.

It's easier when most ISPs are owned by a handful of companies (looking at you, Telekom).